Marriage is the new chapter of a couple's life journey. To start the journey, one of the crucial things to prepare is to have a strong financial foundation to support the dreams and aspirations of the couple. Some of the marriages went separate due to financial issues, which could lead to legal separation, annulment, or divorce. Therefore, to avoid such difficulties, agreements on financial concerns must be talked about to ensure "‘til death do us part" for married couples.
Here are 7 tips for married couples money management:
7 Money Management Tips for Couples
Open Communication
Even before marriage, it is essential to have open communication about finances. It serves as a test for both couples to see if they are mature enough to accept their responsibilities and be independent and dependable partners. This is a good time to discuss your goals as partners, dreams, and aspirations. You can also talk about your plans for when and where you live, own, or rent an apartment. If there are existing debts, plan for repayment procedures, fees for utilities, basic necessities, bills, services, and other living expenses.
Further, you can share your thoughts about things that you want your apartment to experience in the future using your hard-earned money, a great opportunity to bond with a new apartment and create memories to last.
Set Common Goals
Marriage should have something to look forward to, an objective to obtain, and most importantly, a goal to reach. There are two kinds of goals for married couples: short-term and long-term goals.
Short-Term Goals
Short-term financial goals are set to ensure the financial stability of the couple for a short period of time, which could be weeks, months, or a couple of years if possible.
Tackle your debt payments
Unsettled debt becomes more debt. It can grow through interest and penalties, which could lead to bankruptcy. To get rid of it, you need to identify which debt should be prioritized in terms of the amount, payment method, length of payment, and reason why it became a debt. You can pay off debt by paying a little more than the scheduled amount; this will help you in the long run by minimizing the length of repayment.
Budgeting Plan
Learn some tips to make the budgeting process easier. You can adjust your spending on your allowance and make budget cuts to certain expenses to ensure that everything that needs to be paid is paid, all of the expenses are settled, and all the essentials are prioritized. A monthly budget plan is an effective plan since most of us have monthly income and allowances to use.
Know your money
It is expected of married couples to continue their lifestyle even before marriage in a more responsible way. If you are paying rent for two already, your spending has doubled, which means that you are spending money much faster than before. Therefore, managing your money and being financially literate will help both of you continue your lifestyle without thinking about spending too much.
Have Fun
Fun must not be ignored. This would help the married couple enjoy life. Make sure that fun is to celebrate an achievement or be relaxed, and not just for nothing. You can also have fun once in a while once everything is settled.
Long-Term Goals
Long-term goals, on the other hand, are budgeting plans and other expenses that will be beneficial for a long period of time. This is about building assets such as real estate and businesses that can suffice for retirement, the schooling of kids, and vacations.
Smart Budgeting Tips for Monthly Expenses
Outlining financial budgeting together for your budget, expenses, income, and savings This budgeting app is effective in allocating funds for everything.
What is the 50-20-30 rule?
It is a single-dollar budgeting rule divided into three primary parts. An income or allowance must be divided to cater to financial obligations and satisfy the needs and wants of everyone. Which: 50% of disposable income goes to needs; 30% goes to wants; and 20% goes to debt repayment and savings.
50% of gross income goes to the necessities of each couple. This amount is essential for the survival and well-being of the married couple. This includes food and groceries, utility bills, cleaning supplies, renting a house, transportation, healthcare, and dependents who rely on the significant cut in income.
Further, 30% of the income goes to your wants. These are non-essential things that will help us satisfy ourselves and maintain healthy relationships and well-being. This includes streaming services, entertainment lifestyles, gym memberships, vacations, hobbies, and such that will give enjoyment and satisfaction.
Furthermore, 20% of the income goes for debt repayment and savings. This is to pay and settle first and foremost debts such as house loans, student loans, car loans, credit card balances, and other debts. On the other hand, saving enough for the future is a great start for couples. Once you are out of debt, huge amounts of savings can be put into banks, used to start a business, or traded for stocks, which are expected to be sufficient for your future.
What is the 70-20-10 rule?
It is also a general budgeting rule divided into three. An income or allowance must be divided to cater to financial obligations and satisfy the needs, surprises, expenses, and wants of everyone. Which: 70% goes to expenses; 20% goes to your savings; and 10% goes for investment.
70% of your gross monthly income is for expenses. This could be divided into fixed and variable expenses. Fixed expenses are the kinds of expenses that remain constant, i.e., loan payments, taxes, mortgages, and such that are constant or at least within a specific bracket of expenses. On the contrary, variable expenses are those expenditures that are not constant and are always changing, such as your lifestyle, car repairs, entertainment, personal care, and such, based on your monthly expenses.
Further, 20% of income is dedicated to savings. Keeping part of your hard-earned money as a couple and saving it through a bank account is an assurance of safety that you will have enough money for something to use once needed. Saving extra money for kids' educational funds is a great motivation for married couples not to forget their responsibilities to give the best for their family.
Furthermore, 10% will be allocated for investment. A great asset that will always be reliable to secure your family's future. Investing money today through business, stocks, and real estate is the best way to have passive income that will last a lifetime and be passed on to the next generation.
Maintain separate and joint savings accounts
Decide whether you'll have separate or joint bank accounts or a combination of both. Here are the most important things to consider when choosing the right location for each account:
Separate Account
Having separate accounts to save money gives the psychological effect of responsibility and independence. You can spend, save, earn, and use money according to your own expenses and will. This will also avoid comparing unidentical salaries if one of you makes more than the other. Having separate accounts is more convenient since you are the only one allowed to use them, and no one, not even your partner, can decide for you.
Joint Account
This savings account can give transparency to the married couple, a sign of love and trust. This can also be used for any legal requirement or documentation that will testify to the togetherness of marriage. Conversely, joint accounts can cause issues of habitual spending for couples, especially for immature expenses. There is no privacy for both of them, and concerns might be raised that could lead to separation.
Combination of both
This is the best bank account that a married couple could have. A separate account can give them independence and freedom to have their own; thus, a joint account will let them have the affection of being responsible for their own family. A sharing mindset that will avoid individuality.
Designate financial roles
Determine who will handle different financial responsibilities. This can help you fulfill your responsibilities and accountabilities. Splitting expenses is a great way for the couple to avoid being the burden of their own family. Having definitive roles ensures both are actively participating in financial activities such as rent, spending, paying, budgeting, and other activities. This prevents misunderstandings and questionable financial moves that can ruin a healthy relationship.
Emergency Fund Savings
One of the tips is that having a safety net for unforeseen circumstances is an essential move for married couples. It is an asset reserved by the couple to be used for unscheduled expenses and other financial emergencies. Emergency funds must be huge enough to cover expenses for some time during which you expect not to have a stable income without sacrificing your needs, a few of your wants, and all of your spending habits. Emergency funds can be divided into three categories: job and business losses, maintenance, and medical emergencies.
Regular check-ins for living expenses
Schedule regular money discussions to track your spending and make adjustments to your goals and budget. Concerns that might arise and areas that need to be talked about Make this a habit for both of you, and this will help you align everything and adapt to changing circumstances.
Always remember that money and marriage must go hand in hand. Listening and being open to communication with transparency in financial activities is the secret to achieving goals in life that will last a lifetime from one generation to the next.
For more information on Vista Residences, email [email protected], follow @VistaResidencesOfficial on Facebook, Twitter, Instagram, and YouTube, or call the Marketing Office at 0999 886 4262 / 0917 582 5167.
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